Opposition ObjectionsCal. Super. - 6th Dist.July 28, 2020\OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O 200V368776 Santa Clara - Civil WALTER J. LACK, ESQ. (SBN 57550) STEVEN C. SHUMAN, ESQ. (SBN 82828) ENGSTROM, LIPSCOMB & LACK, P.C. 10100 Santa Monica Boulevard, Suite 1200 Los Angeles, CA 90067-41 13 Telephone: (310) 552-3800 Facsimile: (3 10) 552-9434 Attorneys for Plaintiff ALLISON HUYNH Electronically Filed by Superior Court of CA, County of Santa Clara, on 1l21l2022 2:21 PM Reviewed By: R. Burciaga Case #20CV368776 Envelope: 81 12200 SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA ALLISON HUYNH, Plaintiff, [Assigned t0 the Hon. Peter H. Kirwan, Dept. vs. 19] MORRISON & FOERSTER, LLP; PAUL CASE NO. 20CV368776 L. LION, HI; and DOES 1-20, Inclusive, PLAINTIFF’S OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST Defendants. AMENDED COMPLAINT; Plaintiff Allison Huynh, hereby submits her Opposition to Defendants’ Demurrer to First Amended Complaint as follows:/// 449582 i MEMORANDUM OF POINTS AND AUTHORITIES; REQUEST FOR JUDICIAL NOTICE DATE: February 3, 2022 TIME: 9:00 a.m. DEPT: 19 Action Filed: July 28, 2020 [Filed Concurrently With Request for Judicial Notice and Notice 0f Lodging Documents Under Seal] R. Burcie OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT nga \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O TABLE OF CONTENTS Page I. INTRODUCTION ............................................................................................................... 1 II. LEGAL STANDARD ......................................................................................................... 1 III. THE STATUTE OF LIMITATIONS DOES NOT BAR ALL PLAINTIFF’S CLAIMS ............................................................................................................................. 3 A. The Statute of Limitations Commences on Discovery and is Tolled When Plaintiff Has Suffered N0 Injury. ........................................................................... 3 B. Plaintiff Discovered the Wrongful Acts and Omissions Causing Injury Within One Year 0f Filing This Action .................................................................. 4 C. Plaintiff Did Not Suffer Actual Injury in Connection With the Motion t0 Disqualify, so That Motion Did Not Trigger the Statute of Limitations. ............... 5 D. The Statute 0f Limitations Does Not Run Because Defendants are Committing a Continuing Tort ............................................................................... 7 IV. HYUNH DOES NOT NEED TO BRING HER CLAIMS AS DERIVATIVE CLAIMS. ......................................................................................................................................... 8 V. DEFENDANTS OWE FIDUCIARY DUTIES TO PLAINTIFF. .................................... 10 VI. DEFENDANTS CAN BE LIABLE FOR INTERFERING WITH PLAINTIFF’S PROSPECTIVE ECONOMIC ADVANTAGE ................................................................ 13 VII. DEFENDANTS ARE NOT AGENTS OF A PARTY TO THE ECONOMIC RELATIONSHIP AND CANNOT AVOID LIABILITY ON THAT BASIS. ................. 15 VIII. CONCLUSION. ................................................................................................................ 16 449582 ii OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O Page(s) TABLE OF AUTHORITIES California Cases Aaroe v. First American Title Insurance C0. (1990) 222 Ca1.App.3d 124 ................................................................................................................... 8 Adams v. Paul (1995) 11 Cal.4th 583 ....................................................................................................................... 5, 6 Adelman v. Associated Int'l Ins. C0. (2001) 90 Ca1.App.4th 352 .................................................................................................................... 2 American Advertising & Sales C0. v. Mid-Western Transport (1984) 152 Cal.App.3d 875 ................................................................................................................... 3 Asahei Kasei Pharma Corp. v. Actelion (2013) 222 Cal.App.4th 945 ................................................................................................................ 15 Aubry v. Tri-Cily Hospital Dist. (1992) 2 Cal.4th 962 ............................................................................................................................. 2 Avalon Painting C0. v. Alert Lumber C0. (1965) 234 Cal.App.2d 178 ............................................................................................................... 3, 5 Berman v. Bromberg (1997) 56 Cal.App.4th 936 .................................................................................................................... 3 Blank v. Kirwan (1985) 39 Cal.3d 3 11 ............................................................................................................................. 1 CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631 .................................................................................................................. 15 Daniels v. Select Porzfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150 ................................................................................................................ 2 Della Penna v. Toyota Motor Sales, USA, Inc. (1995) 11 Cal.4th 376 ......................................................................................................................... 14 Denevi v. LGCC, LLC (2004) 121 Cal.App.4th 1211 ................................................................................................................ 9 449582 iii OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O People ex rel. Dept. ofCorporations v. SpeeDee Oil Change Sys. (1999) 20 Ca1.4th 1135 ....................................................................................................................... 10 Donabedian v. Mercury Ins. C0. (2004) 116 Ca1.App.4th 968 .................................................................................................................. 1 Goldstein v. Lees (1975) 46 Ca1.App.3d 614 ................................................................................................................... 11 Gong v. RFG Oil, Inc. (2008) 166 Ca1.App.4th 209 ................................................................................................................ 12 Grosset v. Wenaas (2008) 42 Ca1.4th 1100 ......................................................................................................................... 9 Hahn v. Mirda (2007) 147 Ca1.App.4th 740 .................................................................................................................. 3 Ivanofi’v. Bank ofAmerica (2017) 9 Ca1.App.5th 719 ...................................................................................................................... 2 Jones v. HF. Ahmanson & C0. (1969) 1 Cal.3d 93 ................................................................................................................................. 9 Korea Supply C0. v. Lockheed Martin Corp. (2003) 29 Ca1.4th 1134 ....................................................................................................................... 14 Leasequip, Inc. v. Dapeer (2002) 103 Ca1.App.4th 394 .............................................................................................................. 3, 5 Lee v. Escrow Consultants, Inc. (1989) 210 Ca1.App.3d 915 ................................................................................................................... 8 Lee v. Hartley (2015) 61 Ca1.4th 1225 ......................................................................................................................... 2 Livett v. F.C Financial Assoc, Ltd. (1981) 124 Ca1.App.3d 413 ................................................................................................................... 8 McCann v. Welden (1984) 153 Cal. App. 3d 814 ................................................................................................................. 6 McDermott, Will & Emery v. Superior Court (2000) 83 Ca1.App.4th 378 .................................................................................................................... 8 Owens v. Kings Supermarket (1988) 198 Ca1.App.3d 379 ................................................................................................................... 3 449582 iV OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O PHI], Inc. v. Superior Court (1995) 33 Ca1.App.4th 1680 .................................................................................................................. 2 Quelimane C0,, Inc. v. Stewart Title Guar. C0. (1998) 19 Ca1.4th 26 ............................................................................................................................. 2 Redfeam v. Trader Joe’s C0. (2018) 20 Ca1.App.5th 989 .............................................................................................................. 2, 15 Schifando v. City ofLos Angeles (2003) 31 Ca1.App.4th 1074 .................................................................................................................. 2 Schnabel v. Superior Court (1994) 30 Ca1.App.4th 758 .................................................................................................................. 12 Schuster v. Gardner (2005) 127 Cal.App.4th 305 .................................................................................................................. 9 Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Ca1.4th 992 ........................................................................................................................... 2 Stella v. Asset Mgmt. Consultants, Inc. (2017) 8 Cal.App.5th 181 ...................................................................................................................... 8 Stueve Bros. Farms, LLC v. Berger, Kahn (2013) 222 Cal. App.4th 303 ................................................................................................................. 2 Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15 ............................................................................................................................... 2 United Western Medical Centers v. Superior Court (1996) 42 Cal.App.4th 500 .................................................................................................................... 2 Woods v. Superior Court (1983) 149 Cal.App.3d 931 ........................................................................................................... 11, 12 Wyatt v. Union Mortgage Company (1979) 24 Cal.3d 773 ............................................................................................................................. 8 Other State Cases Granewich v. Harding (1999) 329 Or. 47 .......................................................................................................................... 13, 14 Jesse by Reinecke v. Danforth (1992) 169 Wis.2d 229 ........................................................................................................................ 11 449582 V OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH H O Reynolds v. Schrock (2006) 341 Or. 338 ........................................................................................................................ 13, 14 California Statutes NNNNNNNNNr-‘r-‘r-‘r-‘r-‘r-‘Hp-Ap-A OOQONUI-hUJNF-‘OKOOOQQUI-RWNH Am. Law ........................................................................................................................................ 13 Code of Civil Procedure § 340.6(a)(1) .............................................................................................................................. 7 § 340.6(a) and (a)(l) .................................................................................................................. 4 § 452 .......................................................................................................................................... 2 Other Authorities California Rules 0f Professional Conduct, Rule 1.7(b) ................................................................. 12 California Rules of Professional Conduct , Rule 1.18 ................................................................... 10 Tuft, et a1., California Practice Guide, Professional Responsibility (Rutter Group, 2020 Update) ........................................................................................................................... 11 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 457 ................................................................ 3 449582 Vi OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O L INTRODUCHION After having represented Allison Huynh, her eX-husband Scott Hassan, and their many jointly owned companies, and after getting disqualified When they tried to represent Hassan in the divorce case between Hyunh and Hassan based on conflicts arising from that joint representation, Morrison & Foerster and Paul L. Lion now seek to avoid liability for assisting Hassan in depriving Huynh, their former client, of her rightful share 0f the community property she owned With Hassan. Defendants demurred to the original Complaint on the statute 0f limitations. Under the tolling provision 0f the applicable statute 0f limitations, the statute starts running When the plaintiff suffers actual injury from wrongful conduct by an attorney arising out performance 0f legal representation. Hon. Joseph Huber sustained that demurrer based on the statute 0f limitations, concluding from the Complaint that Huynh had sustained actual injury at least a year before filing this action, and that Huynh’s pleading certain conduct breached a fiduciary duty necessarily meant she suffered actual injury from that conduct at the time. Judge Huber granted leave t0 amend. Plaintiff has amended with clarifying allegations that d0 not directly conflict with the allegations already in the Complaint. The First Amended Complaint (“FAC”) now pleads that actual injury, i.e., cognizable legal damages, did not occur until Within one year of the filing of the Complaint. The discovery rule and the continuing tort rule also should defeat the statute of limitations defense. Defendants have asserted other grounds for their demurrer that likewise lack merit. Their derivative claim argument disregards the fact plaintiff is suing for attorney fees that she as an individual, not any corporation, incurred, and the fact plaintiff seeks damages for wrongs directed at her by a controlling shareholder. Defendants’ argument that they owe plaintiff no duties overlooks their own disqualification from representing Hassan against plaintiff and the law underlying that mmmMMMmfimwflwxmaflgflmmmmmmmmmtAMfimmgmmMgmmme interference claims relies on allegations 0f attorney and agent status not pled in the Complaint. H. LEGALSTANDARD A demurrer only challenges defects that appear 0n the face 0f the pleading; 0r from matters outside the pleading that are judicially noticeable. Blank v. Kirwan (1985) 39 Cal.3d 31 1, 318; Donabedian v. Mercury Ins. C0. (2004) 116 Cal.App.4th 968, 994. Courts must liberally construe 449582 1 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O the pleading with a View t0 substantial justice between the parties. Code of Civil Procedure (“CCP”) § 452; Redfeam v. Trader Joe's C0. (2018) 20 Cal.App.5th 989, 996; Ivanoflv. Bank ofAmerica (2017) 9 Ca1.App.5th 719, 726. A complaint must be read in context and given a reasonable interpretation. Schifando v. City ofLos Angeles (2003) 31 Cal.App.4th 1074, 1081. Where the complaint is defective, “[i]n the furtherance ofjustice great liberality should be exercised in permitting a plaintiff to amend his [0r her] complaint. Aubry v. Tri-Cily Hospital Dist. (1992) 2 Cal.4th 962, 970-971; Redfeam, supra, 20 Cal.App.5th at 996. A general demurrer does not lie to only part 0f a cause of action. If there are sufficient allegations t0 entitle plaintiff t0 relief, other allegations cannot be challenged by general demurrer. Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1167; PHII, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682-1683. Any valid claim entitling plaintiff t0 relief overcomes a demurrer. If essential facts of some valid cause of action are alleged, the complaint is good against a general demurrer. Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Ca1.4th 992, 998 (general demurrer may be upheld “only if the complaint fails t0 state a cause 0f action under any possible legal theory”); Quelimane C0., Inc. v. Stewart Title Guar. C0. (1998) 19 Ca1.4th 26, 38-39; Adelman v. Associated Int'l Ins. C0. (2001) 9O Ca1.App.4th 352, 359. A statute 0f limitations demurrer Will not lie Where the action may be, but is not necessarily, barred. The defect must clearly and affirmatively appear 0n the face 0f the complaint; it is not enough that the complaint shows that the action may be barred. Lee v. Hanley (2015) 61 Cal.4th 1225, 1232, quoting Committee For Green Foothills v. Santa Clara County Bd. ofSupervisors (2010) 48 Cal.4th 32, 42; Stueve Bros. Farms, LLC v. Berger, Kahn (2013) 222 Cal. App.4th 303, 321. A statute 0f limitations demurrer lies only Where the dates in question are shown 0n the face 0f the complaint. If not, there is n0 ground for general or special demurrer as dates are not essential t0 the cause of action. Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15, 25; United Western Medical Centers v. Superior Court (1996) 42 Cal.App.4th 500, 505. Defendants rely 0n the sham pleading doctrine in an effort t0 negate the effect 0f the clarifying allegations that plaintiff added t0 the FAC. The sham pleading doctrine applies “where a party files an amended complaint and seeks t0 avoid the defects 0f a prior complaint either by 449582 2 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O omitting the facts that rendered the complaint defective or by pleading facts inconsistent with the allegations 0f prior pleadings. [Citations.]” Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 384.) Under these circumstances, the court is permitted “t0 take judicial notice 0f the prior pleadings and requires that the pleader explain the inconsistency. If he fails t0 do so the court may disregard the inconsistent allegations and read into the amended complaint the allegations 0f the superseded complaint. [Citations.]” Id. “[A] proposed amendment which contradicts allegations in an earlier pleading Will not be allowed in the absence 0f ‘Very satisfactory evidence’ upon which it is ‘clearly shown that the earlier pleading is the result 0f mistake 0r inadvertence.’ [Citations.]” American Advertising & Sales C0. v. Mid-Westem Transport (1984) 152 Cal.App.3d 875, 879. The sham pleading doctrine “does not exist in a vacuum and cannot be mechanically applied.” Berman v. Bromberg (1997) 56 Cal.App.4th 936, 946, quoting Contreras v. Blue Cross 0f California (1988) 199 Ca1.App.3d 945, 950.) The rule is not “intended ‘to prevent honest complainants from correcting erroneous allegations 0r to prevent correction 0f ambiguous statements 0f facts.”’ 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 457, p. 589. “[T]he rule was not intended t0 preclude plaintiffs from providing additional and noncontradictory allegations.” Leasequip, Inc. v. Dapeer (2002) 103 Ca1.App.4th 394, 404, fn. 6. The rule does not prevent honest complainants from correcting erroneous allegations of generic terms Which have legal implications but which are also loosely used by laymen or t0 prevent correction of ambiguous facts. Avalon Painting C0. v. Alert Lumber C0. (1965) 234 Ca1.App.2d 178, 185. The “purpose 0f the doctrine is t0 enable the courts t0 prevent an abuse 0f process.” Hahn v. Mirda (2007) 147 Cal.App.4th 740, 751, citing Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 426. In this case, there is no abuse 0f process. The Court reached some conclusions about When plaintiff first suffered injury from the language pled in the original complaint but offered plaintiff leave to amend. Plaintiff has added language t0 clarify when cognizable legal damages, the definition 0f injury, first occurred. III. THE STATUTE OF LIMITATIONS DOES NOT BAR ALL PLAINTIFF’S CLAIMS A. The Statute 0f Limitations Commences 0n Discovery and is Tolled When Plaintiff Has Suffered N0 Injury. An action against an attorney for a wrongful act 0r omission in the performance 0f professional services must be commenced Within one year after the plaintiff discovers, or through 449582 3 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O the use of reasonable diligence should have discovered, the facts constituting the wrongfiJI act or omission, or four years from the date of the wrongful act or omission, whichever occurs first. The limitations period is tolled When plaintiff has not suffered actual injury. CCP §340.6(a) and (a)(l). B. Plaintiff Discovered the Wrongful Acts and Omissions Causing Injury Within One Year 0f Filing This Action. Plaintiff discovered the wrongful conduct giving rise t0 the damages she is claiming less than one year before the July 28, 2020 filing of this action, i.e. after the July 28, 2019 “critical date” defendants identify for statute 0f limitations purposes. The primary item 0f damages plaintiff seeks t0 recover is the $1.1 million plaintiff spent t0 successfully litigate a halt t0 the underpriced sale of the assets 0f Suitable Technologies (“Suitable”) in Delaware.1 FAC W45-48. Suitable did not even enter the Asset Purchase Agreement until August 22, 2019. FAC 1141. Plaintiff first learned 0f that Agreement in discovery in the divorce case in late 2019. Id. 1158. Plaintiff did not file her Delaware derivative action, and start incurring the fees that comprise her injury from defendants’ wrongful conduct, until November 5, 2019, within a year of filing this action. Id. 1145. Plaintiff did not receive, 0r have any way t0 obtain, documentation, showing defendants’ continued involvement in other transactions until Hassan produced them in discovery in the divorce case in early 2020. Id. 1158. Plaintiff does not know if those other transactions will produce actual injury, because that Will depend 0n Whether she established in the divorce case that the assets with Which defendants were involved were community property and 0n Whether plaintiff fully recovers the value 0f her community interest Via the divorce action. Presentation 0f evidence in that action has closed. The parties submitted Proposed Statements of Decision on 0r about January 18, 2022. Defendants assert the Order on their prior demurrer determined that plaintiff s filing of the Motion t0 Disqualify in May, 2019 showed plaintiffknew more than a year before this case that defendants’ appearing as counsel in the divorce case had injured her, but plaintiff has language in her FAC refuting that conclusion. Plaintiff has alleged in 1156(a) that defendants’ appearance in her 1 While defendants assert that the Delaware Court in that litigation denied plaintiff’s application for a preliminary injunction, that Court, at plaintiff’s urging, declined to approve the sale, and court approval was a condition 0f the sale. FAC 1147. The subsequent sale for the same price in a fire-sale bankruptcy auction, if anything, Vindicates plaintiff’ s position, and the Delaware Court’s conclusion, that the fair market value was higher. RJN EX.5, EX.A 449582 4 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O divorce case, while breaching their fiduciary duty, did not cause any monetary damages. It merely established the predicate for a Court order 0f disqualification that defendants subsequently (within a year of this case) violated. Plaintiff also alleged in FAC 1136 that defendants did not actually use any confidential information of plaintiff during their foray into the divorce case as Hassan’s counsel, so n0 harm occurred in that respect. A Violation of the duty of loyalty does not create damages cognizable in an action against the Violating attorneys if no harm occurred as a result. The Motion and Order to Disqualify prevented legally cognizable damages for which plaintiff could have sued. By adding these specific facts, plaintiff has overcome the conclusion in the prior demurrer Order that filing the Motion t0 Disqualify effected a recognition that injury occurred. Plaintiff s pleading in FAC 1158 that she only learned the facts giving rise t0 this case Within one year 0f filing does not contradict her earlier pleading that she learned those facts within two years 0f filing, because one year is Within two years. Both are accurate; plaintiff has just pled the time frame more specifically and narrowly in the FAC, making this a non-contradictory allegation that corrects a loosely-Worded prior allegation. See Leasequip and Avalon Painting, supra. The narrower time frame is consistent With the allegation in FAC 1158 (and Complaint 1157) that she learned those facts from discovery in the divorce case in late 2019 and early 2020. Thus, t0 the extent plaintiff is seeking in this action recovery 0f the $1.1 million in attorney fees she incurred in Delaware, the action is not barred because the injury did not occur, and plaintiff did not discover it, until after July 28, 2019. Even if the Court completely credits defendants’ statute of limitations argument, at best defendants have shown only a portion of the claim to be barred by the statute of limitations, and they cannot successfully demur t0 part of a cause 0f action. Plaintiff has sufficiently pled a claim for that $1.1 million and other relief that arose Within the statute of limitations. The demurrer 0n the statute 0f limitations should be overruled. C. Plaintiff Did Not Suffer Actual Injury in Connection With the Motion t0 Disqualify, s0 That Motion Did Not Trigger the Statute 0f Limitations. When plaintiff suffers actual injury is generally a question of fact, unless the facts are undisputed and plaintiff suffered manifest and palpable injury as a matter of law. Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 751; Adams v. Paul (1995) 449582 5 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O 11 Cal.4th 583, 593. Plaintiff must have suffered “definite and certain” injury, something more than nominal 0r insubstantial damages. Id. at 589-591. Because actionable harm may occur at any one of several points in time subsequent to an attorney's negligence, the determination ofwhen it occurred is generally a question of fact. McCarm v. Welden (1984) 153 Cal. App. 3d 814, 824. Plaintiff has not pled, 0r incurred, any actual injury as a result 0f the Motion to Disqualify. Plaintiff has pled that she suffered n0 monetary damage as a result of that Motion. FAC W36, 56(a). By order of the Court in the divorce case, Hassan has been paying plaintiff’s attorney fees, including the fees for the battle over defendants’ disqualification in that case. While that order in the divorce case provides for plaintiff to pay her own fees up t0 $20,000 per month, plaintiff exhausted that amount 0n legal work other than the Motion t0 Disqualify, so Hassan funded the work for that Motion, and plaintiff incurred n0 damages as a result 0f that motion. Defendants argue that Hassan’s payment cannot be attributed solely to the Motion t0 Disqualify because all the legal work has to be pro-rated over all the fees paid by plaintiff and Hassan, s0 plaintiff did suffer damages between the May, 2019 filing 0f that motion and July 28, 2019. That argument fails because if plaintiff incurred the $20,000 per month in fees 0n other work, as alleged in FAC 1136, she would have incurred that anyway, so Whatever had t0 be paid for the Disqualification Motion battle was paid by Hassan. If the Disqualification Motion had not been made, only Hassan’s share 0f the fees would have been reduced, so plaintiff cannot be charged with a pro-rata share of those fees for finding injury to trigger the statute of limitations in this case before July 28, 2019. The statute 0f limitations bar must appear 0n the face 0f the complaint, as shown in §II above. Plaintiff alleged 0n the face 0f her FAC, in W36 and 56(a), that she did not incur cognizable damage from the Motion t0 Disqualify more than a year before filing this case. Defendants have not identified any allegation 0f damages arising out of the Motion to Disqualify, and they cannot d0 s0. Defendants further argue that because the fees advanced by Hassan can be allocated back t0 plaintiff in the divorce action, plaintiff has already incurred an obligation t0 pay her attorneys for the work 0n the Motion t0 Disqualify, thus triggering the limitations period back in May, 2019. This argument lacks merit. The obligation is Hassan’s until, if it ever does, the divorce court says 449582 6 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O otherwise. As stated in Jordache, 18 Cal.4th at 754, speculative and contingent injuries are those that d0 not yet exist, as When attorneys’ conduct creates a potential for future harm. This is not an actual, existing injury that might be remedied or reduced in the future, but a speculative 0r contingent injury that might or might not arise in the future. The fees for the Motion to Disqualify may 0r may not be re-allocated to plaintiff in the divorce action, but based on the order currently in effect in that case, they are not an obligation of plaintiff and therefore could not constitute injury under §340.6. Plaintiff could not sue for those fees because Hassan is the one Who paid them. Thus, even though plaintiff has alleged that defendants’ representing Hassan in the divorce case breached defendants’ fiduciary duty t0 her, and that she knew about that particular breach as early as March, 2019, the only damages alleged for breach 0f fiduciary duty are the $1.1 million in attorney fees and the lost value 0f community assets that defendants facilitated for Hassan. None 0f those damages are attributable t0 the Motion t0 Disqualify, and defendants simply miss the mark in arguing that plaintiff admitted in Compl. 1157 that she knew 0f defendants’ wrongdoing based 0n her notice 0f their involvement in the Dissolution Action in March, 2019. Knowledge 0f wrongdoing- even if it existed that early without the later information 1157 alleges provided that knowledge--does not create actual injury, and without actual injury, the statute is not running. The mere existence 0f the conflict 0f interest, while a breach 0f fiduciary duty and important t0 the other legal claims, did not create the monetary loss claimed in this case. Accordingly, under CCP §340.6(a)(1), no statute of limitations could be triggered by the Motion to Disqualify or the appearance of defendants on behalf 0f Hassan in the Dissolution Action per se. With no actual injury, i.e. monetary damage, alleged more than one year before this action, defendants’ statute of limitations demurrer fails. D. The Statute 0f Limitations Does Not Run Because Defendants are Committing a Continuing Tort. Plaintiff has pled that defendants’ conduct is part of a pattern of structuring, negotiating and documenting transactions designed t0 deprive her of her community interest, 0r the value 0f her community property, that continued at least into December, 2019, When the Suitable transaction failed to close after the Delaware Court first opined there was reason t0 believe Hassan’s conduct 449582 7 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O was not motivated by Suitable’s best interests and the assets were worth far more than the proposed sale price, and then declined to approve the sale. FAC 111137-48; RJN, Ex.5, EXA, pp.6-7 of 174.2 The statute 0f limitations does not start running on a continuing tort until it is completed. Wyatt v. Union Mortgage Company (1979) 24 Cal.3d 773, 786-788; Aaroe v. First American Title Insurance C0. (1990) 222 Cal.App.3d 124, 128; Livett v. F.CFinancial Assoc, Ltd. (1981) 124 Cal.App.3d 413, 421. Thus, regardless ofwhen defendants claim the statute should have started running, their own continuing wrongful conduct prevented the statute from being triggered. Any duty to investigate or inquire about suspicious facts is relaxed where defendant owed plaintiff fiduciary duties. If the relationship was such as t0 cause plaintiff t0 rely 0n the fiduciary, there is n0 duty t0 inquire until the relationship is repudiated 0r plaintiffbecomes aware 0f facts that would make a reasonably prudent person suspicious 0f the fiduciary. Stella v. Asset Mgmt. Consultants, Inc. (2017) 8 Ca1.App.5th 181, 197 fn. 13; Lee v. Escrow Consultants, Inc. (1989) 210 Cal.App.3d 915, 921. Defendants owe fiduciary duties to Huynh by Virtue 0f representing her and the family-owned companies that she co-owns. Hence, even absent a continuing tort, the facts would not trigger a duty t0 inquire 0f a fiduciary so as t0 start the statute 0f limitations running. IV. HYUNH DOES NOT NEED TO BRING HER CLAIMS AS DERIVATIVE CLAIMS. Hyunh personally incurred the $1.1 million in attorney fees in the Delaware action. They are not damages suffered by Suitable, nor are they merely incidental t0 the damage Suitable suffered. While the relief sought in Delaware-preventing a below-value asset sale--would benefit Suitable as distinguished from its shareholders, and thus required a derivative action in Delaware, the fees for that action were neither incurred nor reimbursed by Suitable, and the burden 0f them did not fall 0n the corporation 0r the shareholders as a body in proportion t0 their ownership percentage. That burden fell entirely 0n Hyunh, so Hyunh can pursue recovery of those fees individually. McDermott, Will & Emery v. Superior Court (2000) 83 Cal.App.4th 378, 384 is inapposite. Defendants cited it only for its description of a holding in another state. Even at that, the holding involved only the unremarkable proposition that a shareholder Who is suing corporate counsel for 2 References to RJN with exhibit numbers (including this reference) are t0 defendants’ RJN; references to RJN with 449582 8 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O damage t0 the corporation must sue derivatively. Huynh is suing for damage she suffered personally, not damage to Suitable. Schuster v. Gardner (2005) 127 Ca1.App.4th 305, 3 12-313, the other case defendants cite, proves plaintiff’s point. It holds that a claim for loss of value 0f stock 0r loss 0f investment value that is incidental to the harm suffered by the corporation and that affects all shareholders must be asserted derivatively. Huynh’s attorney fees d0 not comprise harm to the corporation, nor are they incidental to harm suffered by the corporation that affects all shareholders. As stated in Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1108 and Jones v. H.F. Ahmanson & C0. (1969) 1 Cal.3d 93, 106-107, an action is derivative if “the gravamen 0f the complaint is injury to the corporation, 0r t0 the Whole body of its stock.” However, “[i]f the injury is not incidental t0 an injury to the corporation, an individual cause 0f action exists.” Denevi v. LGCC, LLC (2004) 121 Cal.App.4th 121 1, 1222. Neither the corporation nor the Whole body of its stock suffered the attorney fees claimed in this case. Only Huynh did. Her claim is not derivative. As to the damages for other transactions, this case parallels Jones v. H.F. Ahmanson & C0. (1969) 1 Cal.3d 93, Where a minority shareholder sued for breach of fiduciary duty against a holding company and present 0r former holders 0f stock in a savings and loan association Who had transferred a control block 0f shares in the association t0 the holding company. The Court ruled that the action need not be asserted derivatively because the complaint did not seek recovery on behalf 0f the corporation for injuries to the corporation 0r for injury incidental t0 injury to the corporation, but rather sought recovery for injury to the shareholder herself and other minority stockholders. She complained that the majority shareholders formed a new corporation whose major asset was to be the control block of association shares but from Which minority stockholders were excluded, and the majority became holders 0f stock more marketable than the association shares. The Court found that although the plaintiff alleged the value 0f her stock had been diminished by defendants' actions, she did not contend the diminished value reflected an injury t0 the corporation and resultant depreciation in the value of the stock. The gravamen of her cause of action was injury to herself and the other minority stockholders. Accordingly, the Court ruled that her suit was not derivative. exhibit letters are to Hyunh’s RJN. 449582 9 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O Hyunh is alleging that one controlling shareholder, with defendants’ assistance, breached his fiduciary duty by siphoning off corporate value for his benefit and t0 her detriment. FAC. 1N 10, 12, 49-5 1, 56(c)-(e), 57. In this regard, she is alleging conduct by one shareholder and corporate counsel against another shareholder, not damage t0 the corporation and its Whole body 0f shareholders. Hassan was a shareholder as well, and he benefited from the conduct alleged. Where the effect 0n a plaintiff/shareholder is not the same as on the other shareholders, the damage is not incidental t0 damage suffered by the corporation, but rather is personal t0 the shareholder suing. To the extent the demurrer is based 0n plaintiff having to sue derivatively, it should be overruled. V. DEFENDANTS OWE FIDUCIARY DUTIES TO PLAINTIFF. Defendants’ contention that they never had an attorney-client relationship With Huynh, and therefore owe her n0 duties, is specious. An attorney-client bond encompasses the earliest moments of the relationship. “The fiduciary relationship existing between lawyer and client extends to preliminary consultations by a prospective client with a View t0 retention of the lawyer, although actual employment does not result. People ex rel. Dept. ofCorporations v. SpeeDee Oil Change Sys. (1999) 20 Ca1.4th 1135, 1147-48; California Rules 0f Professional Conduct (“RPC”), Rule 1.18. Huynh and defendants exchanged many confidential communications before MyDream was ever formed. Huynh, not MyDream-Which did not even exist yet-was the client. The communications between defendants and Huynh about contemplated financing, formation, and operation 0f a business that Huynh wanted to start were part of a confidential attorney-client relationship between them, as was the advice that Lion provided about the structuring, financing, and formation ofMyDream. Defendants could not be counsel to just the corporation When the corporation did not exist and defendants were advising the principal 0n the very subject 0f What legal form the business should take. Defendants did not even transmit a retainer agreement to plaintiff until after they had formed MyDream. FAC 1126. Plaintiff discussed her plans for an educational software and gaming company With Lion, and before the company was ever incorporated, conveyed confidential information and received personal legal counsel and advice from Lion with respect t0 that yet-to-be-formed entity, including with respect t0 her own relationship and involvement With the unformed entity. FAC 1125; 449582 10 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O Declaration of Allison Huynh, RJN, Ex. A.3 This advice relating t0 her personal circumstances and relationship with the proposed business, in light of Hassan’s describing defendants as “our family lawyers”, makes Huynh’s belief that defendants were representing her objectively reasonable, and provides the facts concerning personal advice and the rationale for Huynh’s understanding that she was defendants’ client Which defendants erroneously argue are missing from the complaint. FAC fl28. Defendants argue that they were retroactively representing a non-existent corporation and were not Huynh’s counsel when they were advising her based on Minnesota and Wisconsin cases cited in Tuft, et 211., California Practice Guide, Professional Responsibility (Rutter Group, 2020 Update). One, Jesse by Reinecke v. Danforth (1992) 169 Wis.2d 229, 240-42, involved 23 doctors who retained a firm t0 organize a corporation, two 0fWhom the same firm later sued for malpractice. Defendants’ duties t0 Huynh derive not only from their representation of her and their advising her concerning her nascent business, but also from representing family companies. An attorney representing a presumptively community entity cannot later choose sides and act on behalf 0f one spouse against the other, as defendants did by first attempting to represent Hassan in the Dissolution Action and then assisting and facilitating Hassan’s campaign t0 deprive Huynh 0f her community property interest in the family businesses for which defendants were and are counsel. This is the lesson of Woods v. Superior Court (1983) 149 Cal.App.3d 931, 933, 937 Where the Court 0f Appeal disqualified an attorney who had been representing the family business from appearing as counsel for the husband in a divorce proceeding. In holding that the attorney of a family-owned business could not represent one owner against the other in a dissolution action, Woods rejected the argument that the attorney was representing only the family business and therefore owed n0 duties to the Wife. The Court held that “the proper focus should be on the fact that in representing an ongoing family corporation, [counsel] in a very real sense continues t0 represent wife.” Id. at 935. A“corporation’s legal adviser must refrain from taking part in controversies among shareholders as to its control, and When his opinion is sought he must give it without bias or prejudice.” Woods, supra, 149 Ca1.App.3d at 936. Goldstein v. Lees (1975) 46 Cal.App.3d 614, 3 Huynh’s RJN, EX. A is the same Request to Disqualify Counsel as Defendants’ RJN, EX. 1, except Huynh’s RJN, 449582 1 1 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O 622 held that even after an attorney ceases t0 be employed by a corporation, the attorney “must refrain from taking part in any controversies 0r factional differences which may exist among shareholders as to its control.” Thus “[w]hen [the attorney’s] opinion is sought by those entitled to it, or When it becomes his duty to voice it, he must be in a position to give it Without bias or prejudice and to have it recognized as being so given. . .Unless he is in that position, his usefulness to his client is impaired. . .This duty to act without bias 0r prejudice does not dissolve merely because the attorney has been discharged.” Allowing the attorney for a family company, co-owned by a husband and wife, t0 represent the husband against the Wife 0n matters relating t0 the family company would create “serious problems” because (1) the attorney owes “undivided loyalty” to the family company and “cannot take sides in a serious dispute between its owners” and (2) there is a presumption that the attorney obtained confidential and/or otherwise protected information through its prior representation that might be disclosed in the successive representation. Woods, supra, 149 Ca1.App.3d at 934-936. Other cases have reiterated the principle that an entity’s lawyer cannot Choose sides between competing owners. Gong v. RFG Oil, Inc. (2008) 166 Ca1.App.4th 209, 214 held “A corporation’s legal advisor must abstain from taking part in controversies among the corporation’s directors and shareholders.” In Schnabel v. Superior Court (1994) 3O Ca1.App.4th 758, 759-60, the Court in a dissolution proceeding found joinder of a corporation ofwhich the couple owned 30% to be necessary because the corporation and the husband were represented by the same law firm, the corporation had paid the husband’s attorney fees, and the corporation exhibited favoritism toward the husband. Id. at 763-64. Citing Woods, the court expressed “concern” that the husband was being represented by the same lawyers as the corporation. Id. at 763, n.5. See RPC, Rule 1.7(b). This is the same authority that already persuaded the Court in the Dissolution Action t0 disqualify defendants from representing Hassan in that action. RJN EX. A, pp.9-13; and EX. B. Thus, both defendants’ duties to Huynh from having represented and advised her before MyDream existed, and defendants’ duties of loyalty from representing family companies require that Ex. A includes Huynh’s Declaration, pp. 16-17 of the document, which Defendants chose to omit. 449582 12 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O defendants not facilitate diverting 0f corporate value, 0r the devaluing 0f assets, in family companies so as t0 favors one spouse over the other, and that they pay damages if they do. VI. DEFENDANTS CAN BE LIABLE FOR INTERFERING WITH PLAINTIFF’S PROSPECTIVE ECONOMIC ADVANTAGE. According t0 the Restatement (Third) 0f the Law Governing Lawyers§57(3) (Am. Law. Inst. 2000), as quoted by defendants, a lawyer advising his client is not liable t0 a non-client for interference With contract or prospective contractual relations if the lawyer acts t0 advance the client’s objectives without using wrongful means. Under that standard, defendants actually can be liable for interference with prospective economic advantage because they did use wrongful means. They have acted in breach 0f fiduciary duties and the duty 0f loyalty they owe t0 plaintiff as her former counsel and as counsel for family-owned businesses, as set forth in §V above. FAC fl66. This breach of defendants’ own independent duties t0 the plaintiff is absent from Reynolds v. Schrock (2006) 341 Or. 338, and every other case defendants cite for the purported existence 0f a privilege 0n the part 0f the attorneys t0 aide and assist in their own client’s breach 0f fiduciary duties. In Reynolds, Reynolds and Schrock jointly owned two properties, and t0 settle differences, agreed that Reynolds would transfer his interest in one 0f the two jointly owned properties t0 Schrock and that Schrock and Reynolds would sell the second property. If the second property sold for less than $500,000 then Schrock would grant Reynolds a security interest in the first property. Schrock’s attorney then advised Schrock to sell the first property and revoke the consent to sell the second property. Reynolds sued both Schrock and Schrock’s attorney for breach 0f fiduciary duty. The court found that Schrock’s attorney could not be held jointly liable with a client for the client's breach of fiduciary duty unless the third party showed that the lawyer was acting outside the scope 0f the lawyer-client relationship. The court distinguished the case Reynolds had relied on, Granewich v. Harding (1999) 329 Or. 47, which allowed an action against an attorney for assisting others in breaching the fiduciary duties they owed as majority shareholders t0 the plaintiffs as minority shareholders. In Granewich, according to Reynolds, the lawyer being sued was the attorney for the corporation, not the individuals that owed the fiduciary duties. 341 Or. at 344. Huynh has alleged that defendants represented the various family corporations, not Hassan 449582 13 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O individually. FAC 1N4, 5, 9, 10, 29, 39, 40, and 5 1. Indeed, defendants themselves drew this very distinction, claiming to have represented MyDream but not Huynh. Demurrer, pp. 12-13. Huynh has alleged an advantageous economic relationship with Hassan, not with the companies defendants represented. FAC 1162. Thus, this case falls Within the category 0f Granewich, where the Oregon court allowed an action against the attorney for aiding a non-clients’ breach 0f fiduciary duty, and is unlike Reynolds, Where the court found a privilege for the lawyer advising his own breaching client, but specifically distinguished the situation 0f the corporation’s lawyer aiding in the breach by the corporation’s shareholder. N0 privilege applies here based on defendants’ own authority. Reynolds also does not apply because in Oregon, one can be liable for harm resulting t0 a third person from the tortious conduct of another, if his own conduct, separately considered, constitutes a breach 0f duty to the third person. Reynolds, supra, 341 Or. at 345. However, the parties in Reynolds agreed that Reynolds did not assert that the attorney's own conduct, separately considered, constituted a breach of duty t0 Reynolds. Hence, the holding 0f Reynolds finding a privilege 0n the part 0f the attorney does not apply Where the attorney breached a separate duty t0 the plaintiff. Huynh alleges that defendants’ conduct in aiding Hassan did, separately considered, breach a duty t0 Huynh. FAC 111153-57, 66-67, 75-76. For this additional reason, the authority in Oregon and other states, and the Restatement cited above, does not establish that a privilege would apply t0 defendants’ conduct in this case. Defendants admit that no California court has ever held such a privilege exists, and given the requirements in California for the tort itself, such a privilege would be superfluous. The tort of interference With prospective economic advantage, intentional 0r negligent, requires that the conduct 0f the defendant be independently wrongful. Korea Supply C0. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1158-59; Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 392-393. If the attorney’s conduct is independently wrongful apart from just the interference itself, such as in this case Where it breaches independent fiduciary duties owed t0 Huynh, there is no justification for cloaking the attorney’s conduct in a privilege. Based 0n the distinctions between this case and defendants’ cited authority, the specific requirements 0f the tort in California, and the absence of any California authority supporting a privilege, the demurrer should be overruled t0 the 449582 14 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-RUJNH NNNNNNNNNHr-tr-‘r-‘r-‘r-‘r-tr-Ar-AH OOQONUI-hUJNF-‘OKOOOQQUI-RUJNF-‘O extent it is based on a purported privilege exempting defendants from liability for interference. VII. DEFENDANTS ARE NOT AGENTS OF A PARTY TO THE ECONOMIC RELATIONSHIP AND CANNOT AVOID LIABILITY ON THAT BASIS. Asahei Kasei Pharma Corp. v. Actelion (2013) 222 Cal.App.4th 945, 961-968, held that a parent company and its officers could be liable for interference with the contract 0f a subsidiary and for interference with prospective economic advantage. The officers had n0 insulation as agents because they were agents of a non-contracting party. Such is the case here. Hyunh’s economic relationship was with Scott Hassan. FAC W62, 64, 65. Huynh has alleged that defendants represented the various family corporations, not Hassan individually. FAC 1N4, 5, 9, 10, 29, 39, 40, and 5 1. A11 those allegations are incorporated into the causes 0f action for interference With prospective economic advantage. Defendants ignore all those clear allegations that they represented entities Who were not parties t0 the economic relationship and seize 0n some admittedly imprecise language in FAC fl63 asserting they had the requisite knowledge of the advantageous economic relationship while they were “representing and advising Hassan and the companies he established”. In context the clear intent 0f that quoted language is t0 refer t0 advising Hassan in the course of representing the companies plaintiff has alleged throughout the Complaint that defendants represent. It was not plaintiff’ s intent t0 plead that defendants were representing Hassan individually so as to exonerate them as agents 0f the party t0 the economic relationship, when plaintiff had scrupulously to that point only alleged defendants represented the companies. Such an interpretation would Violate the principles that courts must liberally construe the pleading With a View to substantial justice between the parties and must read a complaint in context and give it a reasonable interpretation. Courts cannot sustain demurrers Without leave t0 amend based 0n ambiguities. CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 635. Merely having an economic interest in a contract 0r a relationship 0f others does not insulate a party from liability for interfering with that contract 0r relationship. Thus, a parent company can be liable for interfering With its subsidiary’s contract. Asahei, supra, 222 Cal.App.4th at 961-965. A nonparty t0 a contract that contemplates the nonparty's performance, by that fact alone, is not immune from liability for contract interference. Redfeam, supra, 20 Cal.App.5th at 449582 15 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-PUJNv-i NNNNNNNNNr-tr-tr-dr-tr-tr-tr-tr-kr-tr-t OOQONUI-PUJNF-‘OCOOQOUI-PUJNF-‘O 1003 (market could be liable for interfering With contract between food processor and broker, even though it had to buy from broker for contract to be effective). Defendants do not even have a monetary interest in the economic relationship between Huynh and Hassan. Neither defendants nor any of the companies t0 Which they are counsel would suffer economically if Hassan did not breach his duties in managing and preserving the community property. Even if they did, though, it would not defeat the claim against defendants because they would still be agents of strangers t0 the Huynh/Hassan relationship. Plaintiff has not clearly pled that defendants are agents of Hassan, and in light 0f the numerous allegations that defendants represent the companies, any ambiguity in pleading their status should be disregarded. T0 the extent the demurrer relies 0n agency 0f a party t0 the relationship, it should be overruled. VIII. CONCLUSION. The Court should overrule the demurrer in its entirety. If it sustains any part of the demurrer, plaintiff requests leave to amend. Dated: January 21, 2022 ENGSTROM, LIPSCOMB & LACK WC”.WWL By WALTER J. LACK STEVEN C. SHUMAN Attorneys for Plaintiff 449582 16 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-PUJNv-i NNNNNNNNNr-tr-tr-dr-tr-tr-tr-tr-tr-kr-t OOQONUI-PUJNF-‘OKOOOQOUI-PUJNF-‘O PROOF OF SERVICE STATE OF CALIFORNIA ) ) ss. COUNTY OF LOS ANGELES ) I am employed in the County of Los Angeles, State 0f California. I am over the age of 18 and not a party t0 the Within action; my business address is 10100 Santa Monica Boulevard, 12th Floor, Los Angeles, California 90067-41 13. On January 21, 2022, I served the foregoing document described as PLAINTIFF’S OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES the interested party(ies) in this action as follows Ragesh K. Tangri, Esq. David McGowan, Esq. Bethany D. Bengfort, Esq. DURIE TANGRI LLP 217 Leidesdorff S. San Francisco, CA 941 11 Tel: 415-362-6666 Email: fiangri@durietangri.com dmcgowan@durietangri.com bbengfofi@durietangri.com X (BY E-MAIL/ELECTRONIC TRANSMISSION): Based on a court order 0r an agreement 0f the parties t0 accept service by e-mail 0r electronic transmission, I caused the documents to be sent t0 the persons at the e-mail addresses listed below. I did not receive, Within a reasonable time after the transmission, any electronic message 0r other indication that the transmission was unsuccessful. (TO ALL NOTED ON SERVICE LIST) X (STATE) I declare under penalty of perjury under the laws of the State 0f California that the above is true and correct. Executed on January 21, 2022, at Los Angeles, California. Marlene Fletcher 449582 17 OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT
